Daily Newspapers and Recycling in Ontario

CNA is a key stakeholder in the Waste Diversion Organization in Ontario. Updates are available in the members-only area of the website.

NEWSPAPERS: RECYCLING AND RECOVERY
Governments are increasingly approaching industry to take more responsibility to achieve waste diversion goals and are looking to producers (“stewards”) to pay for the cost of waste management, including recycling programs.

In most Canadian provinces, recycling programs are run by municipalities and funded through the tax base or user fees. The sale of recyclable materials by municipalities – especially aluminum and old newspapers (ONP) back to aluminum manufacturers and paper mills – off-sets a substantial portion of the costs. Such is the case in BC and Alberta: The Alberta government notes that “[old newspaper] is the most visible and most widely collected waste paper grade in Alberta’s municipal recycling programs and generally contributes the most revenue for municipal collection programs.” In New Brunswick, Prince Edward Island, and Newfoundland and Labrador, municipalities use revenues from the sale of recyclable products like ONP to fund recycling programs and absorb the cost difference out of the tax base. In Saskatchewan and Manitoba, a levy on soft drink containers raises sufficient revenues to finance recycling. However Manitoba has begun moving toward a “Stewardship Model”.

Quebec, Ontario and Nova Scotia have fully adopted stewardship models. It is somewhat different in each province, however there are strong similarities in how newspapers are treated. All three share the same approach t, in that newspapers are required to make a contribution to municipalities’ recycling programs, but do so in the form of in-kind donations of advertising space to promote recycling.

This approach is consistent with how newspapers are managed in recycling regimes all over the world. There is no jurisdiction in the world where newspapers are required to make a cash contribution to fund recycling programs. Newspapers have been treated differently because of the recognition, in Canada and abroad, that they provide a public benefit, that they can make a significant contribution to public education on recycling, and that they are not a packaged good like other materials in the recycling stream.

THE RATIONALE

Newspapers have earned an entitlement to different treatment based on recognition that:

• Newspapers perform a role in democratic process and in public education that is recognized and protected under the Charter as well as numerous Supreme Court decisions;
• Abundant legal precedent exists for treating newspapers differently from other industries and especially from other consumer products (Income Tax Act S19; PIPEDA, new Telemarketing Rules in Bill C-37, etc. ;
• Newspapers are not a consumable product – there are no contents and no packaging; the two are indistinguishable;
• Treating newspapers like packaged goods discriminates unfairly against newspapers, as the packaged goods industry has no obligations with regard to the contents of their packages, just the packaging;
• ONP has value as a commodity traded on international markets; while that value fluctuates in accordance with demand it is a fact that Canada cannot produce enough ONP to satisfy the demand of Canadian mills, which is a reason why over time the activity of recycling ONP should be cost neutral when systems are operated efficiently.
   

ONTARIO NEWSPAPERS - A ROADMAP FOR OTHER PROVINCES

In 2000, the CNA negotiated an arrangement directly with the Ontario provincial government. Dailies and weeklies would be exempt from subsidizing the Blue Box program in cash. In lieu, they would provide in-kind advertising to promote waste diversion in Ontario. This agreement has saved the newspaper industry hundreds of millions of dollars.

Daily and community newspapers in Ontario were exempted from the requirement to contribute cash payments based on the amount of recyclable waste generated and recovered through the blue box program, as other industries are required to do. Instead, they agreed to contribute $1.3 million in in-kind advertising to promote recycling. This arrangement was negotiated directly with the provincial government in 2000.

Newspapers are nevertheless required to contribute cash payments to bear the administrative costs of Stewardship Ontario In 2007, the total value of the in-kind contribution plus the administrative payment was in the region of $1.8 million. (CNA also pays WDO for the implementation of the in-kind program).

The in-kind contribution is distributed among the province’s daily and community newspapers in accordance with circulation data and is allotted to the province’s 600+ municipalities so that they may use it to place free advertising to encourage recycling.

In 2005, the Government of Ontario enshrined the in-kind model for newspapers’ contribution, through an amendment to the Blue Box Program, thus ending several years of discussion led by municipalities unhappy with the arrangement.

In enshrining the arrangement with newspapers, the Government of Ontario recognized the extraordinary success of newspaper recycling in the province. Recovery rates for ONP in Ontario have climbed to over 80%, easily one of the highest recovery rates anywhere in the world.

THE PLAYERS
MOE
The Ontario Ministry of the Environment was established in 1972, with the merging of the Department of the Environment and the Ontario Water Resources Commission.

AMO
The Association of Municipalities of Ontario is a non-profit organization representing almost all of Ontario’s 445 municipal governments and provides a variety of services and products to members and non-members.

SO
Stewardship Ontario: Industry Funding Organization that allocates costs to industry partners in a 50-50 split with the municipalities

WDO
Waste Diversion Ontario: A non-crown corporation created under the Waste Diversion Act (WDA) on June 27, 2002. WDO was established to develop, implement and operate waste diversion programs for a wide range of materials.

The “Stewards”
Ontario’s Waste Diversion Act requires all companies that introduce packaging and printed material into Ontario’s consumer marketplace (“Stewards”) to share in paying 50% of the funding of Ontario’s municipal Blue Box waste diversion programs.

Some History

• 1972 - Early Days: Newspapers were recycled as a public service as early as 1972 in a City of Toronto initiative. The Blue Box program began as a pilot project in Kitchener in 1981.
• 1986 – Government subsidizes recycling costs: Starting in 1986 the Provincial government reimbursed municipalities for a portion of their operating costs (labour costs, gasoline, etc) for their Blue Box programs
• 1997 – Provincial Funding ends: With provincial funding ending completely at the end of 1997, municipalities had only recycled material revenues and municipal taxes to support the Blue Box program.
• 1998 – Province’s Blue Box Program requires industry to contribute: On October 7, the Minister of the Environment announced his plan for the Blue Box program. This initiative called on industry to contribute voluntarily.
• 2000 – CNA successfully negotiates a special arrangement for Ontario newspapers – no cash provision, but in-kind advertising (administration fees to WDO and SO in cash)
  Newspapers’ obligation increases
• 2007 - The CNA’s obligation was increased to providing municipalities an advertising insert promoting waste diversion in Ontario. Newspapers inserted an 8.5" X 11" flyer into one edition.

Some concerns regarding the current system
•CNA has expressed concern over the absence of effective cost containment, performance targets, economies of scale, or incentives to municipalities to achieve efficiencies in ways that do not prejudice industry;
•The fees per tonne formula that was established penalizes good recyclers; industry whose waste goes to landfill pays nothing toward the cost of the Blue Box.

CNA Specific Factors
- Single stream collection1: as more municipalities move to an integrated collection system, the value of ONP declines, and the cost of processing it rises
- Downward pressure from mills on fibre prices – Ontario ONP could be downgraded - even in two-stream collection systems
- SO has increased CNA’s share of the administrative cost of the system. SO argues that the newspaper industry’s original assessment was too low - more time and effort than originally anticipated is required to cull and track data and this drives up cost. At the same time, other industries have been assessed downwards – this is a reallocation.

1 Single Stream means one pickup, one blue box – all items combined: This lowers collection costs for municipalities, but industry ends up paying for separation that residents used to do. Glass and other materials contaminate fibre, depress quality, and increase processing costs for ONP.

NOVA SCOTIA AND MANITOBA RECYCLING

Nova Scotia and Newspaper Recycling
Nova Scotia adopted a Stewardship Model similar in many aspects to Ontario’s. The chief common denominator is that newspapers make an in-kind, not cash contribution.

Recycling is managed through the RRFB (Resource Recovery Board), a non-profit corporation managed by a board of directors with representatives from the private sector and government.
Stewardship agreements have been signed with the daily and community newspapers throughout Nova Scotia. Newspapers’ in-kind contribution is calculated on the basis of $10 per tonne of self produced news print (i.e. inserts etc. that are circulated with the papers do not count).
Newspapers pay this fee in the form of advertising credits to the RRFB for advertisements which would not otherwise be required (e.g. awareness advertising campaigns).
The newspaper industry donates approximately $200,000 of in-kind advertising space annually to assist RRFB Nova Scotia and the municipalities to educate the public about recycling issues.

Manitoba and Newspaper Recycling
In 1993, the Government of Manitoba agreed to deduct any future levies for recycling on newspapers from the Provincial Sales Tax (PST) collected on the sale of newspapers in the province.
It was the intent of the Government of Manitoba of the day that this exemption from recycling charges would partially offset the PST charged on newspapers.

Until recently, the cost of recycling in Manitoba was carried by the soft drink levy. Beverage producers have had the option of setting up a deposit-return system or of paying a 2 cent charge per container. All except beer producers have chosen the latter option. When the province sought to broaden the range of materials diverted from the waste stream, it anticipated that revenues from the soft drink levy would no longer suffice and it began exploring a Stewardship Model similar to Ontario’s in which industry pays 50% of the cost of recycling.

However in 2007, the Government of Premier Gary Doer reconfirmed that it would honour the 1993 agreement with the province’s newspapers and continue to exempt newspapers from recycling fees.

The CNA continues to invest a large portion of its time on the recycling file, on behalf of its members. For more information on the Blue Box Program, please visit the Members’ Area on the CNA website www.cna-acj.ca.